Rock Island daily Argus. (Rock Island, Ill.) 1886-1893, 1887-10-19
WITH A SHARP STICK.
DELuDED STOCKHOLDERS AFTER JAY
GOULD AND RUSSELL SAGE.

A Civil Suit for Accounting Begun,
and Another Designed in Which the
Objective Point Is States Prison for the
Two Great Financiers-Origin of the
Difficulty.
NEW YORK, Oct l9-The papers have
been drawn for a suit which Lawyer w. H
Delaney says will soon be begun in the
supreme court against Jay Gould and Russell
Sage. trustees, by Adrian Stoop and Jan
Otto Wilem Franz Rens, foreign holders of
s34, 900 of Kansas Pacific consolidated bonds,
to compel an accounting Of the trust OF
Denver Pacific bonds about which the Pacific
railroad commission took a good deal Of
testimony. The suit is on the same lines as
one begun for American bondholders by Mr..
Delaney. but settled without a trial
The complaint, which is long, is founded on
the testimony referred to- Ii sets forth that
the trustees named betrayed their trust, and
pocketed the trust funds, and are accounta-
ble for about 81, 600, 900 to the bondholders,
and asks that they be removed, and that a
receiver be appointed for the assets of the
trust.
1t is alleged in the complaint that in 1879
general mortgage WAS made covering all
the roads, rolling stock and other property of
the Kansas Pacific railroad, and that Jay
Gould and Russell Sage were made trustees
The Kansas Pacific put up s., 0OO, 900 of Den
yer Pacific stock as security for the bonds
Jay Gould, Russell Sage and Sydney Dillon
were directors of the Kansas Pacific and the
Denver Pacific, and controlled the boards
1t is further alleged that they conspired to
get the Denver Pacific stock back to the
Kansas Pacific treasury by collusive suit,
on the plea that it was nearly worthless,
knowing that it would jump from 10 up to
above par, because they had already ar
ranged for its consolidation with Union Pa
cific and Kansas Pacific stocks; that they de-
ceiyed the court and divided the stock. The
foreign bondnolders say that this proceeding
deprived them of the contracted security on
their mortgage bonds.
Manager Delaney says that criminal pro-
ceedings will also be instituted against Mr.
Gould and Mr. Sage, and to this end the fol-
lowing letter was written by Mr. Delaney
TO Mr.. E. Ellery Anderson, of the Pacific
railway investigating commission:
DEAR SIR: would request copy of the printed
records of the proceedings had before the Pacific
railway commission for the purpose of laying the
same before the district attorney of New York
county, with a view to the enforcement of the
provisions of the penal code relating to trustee.
againt Jay Gould and Russell Sage. An early an
swer will oblige. Yours respectfully,
WILLIAM II. Delaney
To this Mr. Anderson returned the follow
ing answer:
DEAR SIR: ] have your note Of this date. re
specially refer You the last clause of section
,, of the act of March 3 lsSi under which the
United States Pacific railway commission is es
tablished. II is provided that the evidence OF
| testimony taken before ms shall not be usec
against the person SO testifying on the trial Of
any proceeding.
| don't think that the commission can, within
| the fair meaning and spirit of the provision
| quoted, furnish you with the printed record Of
| our proceedings with view to the enforce
ment Of the provisions of the penal code relating
| 10 trustees against Jay Gould and Russell Sage
| Yours respectfully, f ELILERy ANDERSON.